The charges relate to reviews posted on the App Store by Reverb staff about their clients’ iPhone games, without disclosing their paid relationship with those publishers.

"Reverb and Snitker did not disclose that they were hired to promote the games and that they often received a percentage of the sales," says the FTC’s statement.

"These facts would have been relevant to consumers who were evaluating the endorsement and deciding whether to buy the gaming applications."

Reverb is one of the first companies to fall foul of new FTC rules on online endorsements and testimonials, which requires such connections to be disclosed.

The company has been ordered to remove all the reviews in question, and to not post any more App Store reviews unless they ‘fess up to their relationship with the publisher.

"Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising," says Mary Engle, director of the FTC’s division of advertising practices.

"Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers."

The FTC settlement sends out a warning to other PR firms and marketing agencies, although it’s unlikely to stop individual developers giving their own apps five-star reviews, as is commonplace.

Reverb’s co-founder Tracie Snitker seems unhappy with being the subject of the FTC’s scrutiny, judging by a statement issued to the New York Times.

"It became apparent that we would never agree on the facts of the situation," she says.

"Rather than continuing to spend time and money arguing, and laying off employees to fight what we believed was a frivolous matter, we settled this case and ended the discussion."Story originally published on ME